Thinking through the write-off: Arguments for the peculiarities of the depreciation charge
Abstract
AbstractThis paper surveys the relevant literature on the timing and nature of charges against income on long-lived assets. Within the framework of accounting, the spectrum ranges from complete, immediate write-off justified... [ view full abstract ]
Abstract
This paper surveys the relevant literature on the timing and nature of charges against income on long-lived assets. Within the framework of accounting, the spectrum ranges from complete, immediate write-off justified under income tax law expensing to financial reporting to external financial statement users where the rule calls for a systematic and rational approach. And then internal managerial accounting may provide a third set of propositions and results. While national income accounting and pundits for U.S. federal income tax reform may voice their arguments for rapid, if not immediate expensing, that distraction is not studied in the paper. Rather, the concern is for what is, or perhaps should be, appropriate under generally accepted accounting principles for external financial reporting on the one hand, and for internal managerial use under an entity’s accounting policies and procedures. The paper also includes suggestions teaching faculty may use with depreciation write-off situations to illustrate related conceptual issues in accounting such as periodicity, matching, and cost versus market.
The author(s) propose(s) to review the literature of depreciation and to make comparisons with various standard setting bodies globally. Accordingly, a contribution can be made toward analysis both longitudinally on a long-term historical basis and cross-sectionally on a contemporaneous basis.
Authors
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Greg Kordecki
(Clayton State University College of Business)
Topic Area
Topics: Accounting - click here when done
Session
AC2 » Accounting Regulatory Issue (09:45 - Friday, 6th October, West B)
Paper
Depreciation_9.28.17-11_pt.pdf
Presentation Files
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